Powell’s testimony bolstered global risk appetite

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Powell’s testimony to Congress last week indicating the Federal Reserve will likely cut interest rates at the end of the month infused the optimism market participants need badly as they fretted about the state of US-China trade talks. The S&P 500 extended gains 0.8% while the ICE US dollar index lost 0.4%.

The three main US stock indexes added to previous week’s gains while FTSEE 100, Nikkei and Hang Seng pulled back. Dow recorded the biggest gain: it rose 1.5%. Only the Canadian and Australian dollars out of six major currencies maintained previous week’s dynamics, while the range of major currency pairs’ weekly fluctuations narrowed as it shifted lower. The Swiss franc remained the leader in terms of percentage change: it gained 0.8% against the US dollar.

This week several Federal Reserve officials will speak before going quiet in the blackout ahead of their decision on July 31. Fed Bank of New York President John Williams speaks on Monday and Thursday, Powell will speak at a dinner in Paris on Tuesday. Charlie Evans of Chicago on Wednesday and Raphael Bostic on Thursday. James Bullard of St. Louis and Boston’s Eric Rosengren will talk on Friday. It is widely expected the central bank will cut interest rates 25-basis points.